AptarGroup (ATR) 26 Apr 242024 Q1 Earnings call transcript

Ladies and gentlemen, thank you for standing by. Welcome to Aptar's 2024 First Quarter Conference Call. [Operator Instructions] Introducing today's conference call is Ms. Marry Skafidas, Senior Vice President, Investor Relations, and Communications. Please go ahead.

you. Thank thanks us and being for everyone, today. with Hello,

are President Vice and me and on and Tanda, call today's Executive Joining CEO; Stephan Bob CFO. President, Kuhn,

have website Our posted page. slide and press deck release on the under our Investor Relations accompanying been

will call, certain discussing we non-GAAP During measures. be this financial

non-GAAP GAAP for the forth to measures press in this measures These comparable release. reconciled reconciliations press the GAAP and Please during the to measure are to release the yesterday disseminated reconciliations of directly refer comparable discussed most most financial are the set measures call. earnings

will post we always, of As website. also this our call on replay a

And the conference now turn like Stephan. I to call over would to

will Marry, We CFO, highlighting morning, everyone. by key and Later us our appreciate first you, the quarter on additional the provide good drivers our my today. Kuhn, begin for call, Bob quarter. results. remarks joining Thank on I details in will you the call

Starting on Slide X.

pleased North the report Aptar more quarter. as of For the delivered XX% X% to for EPS that Strong sales as year improved performance first unit over systems, Pharma the achieved increase segment's growth $X.XX, and to demand the markets injectables recovery results. proprietary delivery for contributed end our than drug adjusted a American and in of prior I'm positively quarterly quarter, core consumer well our

with high XX% sales the to continued than segment, XXXX. quarter in core see robust delivery sales single-digit Pharma first systems proprietary in Our following growth our the of growth core more quarter of drug

system from emergency across and every and categories broad-based medicines, central market Demand treatments, in was with end region growth through therapeutics. allergy nervous several

within and prior quarter year components demand double-digit expected the XXXX to of did over improvement ERP systems sales continue is our biologics repeat, long-term strong first growth market sales grow after the quarter not XXXX. also this proprietary drug our of implementation for core to headwind unit the saw core portfolio injectables to from reminder, target a a range X% in as for marked The As the year XX% nicely. system delivery elastomeric grow

first be for [ build-out early the Beauty final in of capacity and be challenging XXXX. this for as comparison with online U.S. XXXX the sales ] to in XXXX expansions exceptional are was come Europe in XXXX year strong quarter for for a In by France announced phases validated expected continues year-over-year to first our injectables basically commercialization core segment, flat of fragrance growth quarter was dispensing. a and driven sales that a

year, launches As market by a a reminder, last boom growth COVID. fragrance was driven post in

fragrance As for solutions we expect year more for but pace. continued at mentioned, previously dispensing a growth the measured

sales Beauty EBITDA in were range. normalized, long-term Europe margins the Even segment's within for region adjusted as the well EBITDA margin

now Turning North America. to

soft. markets destocking coming end region the an end. showing to that some remain clear is While is signs Overall, the widespread

We not linear continue and to Beauty be end end across will segments. Closure our expect by that market will different be market and recovery

on costs reducing priority top XXXX. fixed focus a Our in and rationalization remains footprint

margins. improved have last we the Over quarters, several

including a XXXX, plans since European reminder, several in France. in formal programs initiated countries, X As we reduction cost social

the that We This is X%. America. mentioned, year closed midyear. a addition last by Beauty facility is about in previously the reducing finalized was by serves segment's be closing in as workforce North that to are And facility the of expected France in European to closures

basis and points. -- of sales selling, quarter-over-quarter, we by XX a SG&A Additionally, as have percentage reduced of administrative general an

manufacturing but country. of half for maintain second the in we our close plan in our the for the ahead year, operations pharma and beauty manufacturing Argentina operations to closures Looking in

and while market meeting leverage We operational demand. increase streamline will footprint continue review our to to

manner sustainable recognitions. to We recent an in highlighting and developing solution important Now competitive product X, and for awards corporate advantage believe sustainable Aptar. Slide more moving a firmly is operating

Barron's one companies reflection named for As U.S. during we XXXX. most the year, XXX our of quarter, were the progress a companies sustainable #XX of consecutive for ranked of out sixth

Carbon the Project, known many formerly emission highly supplier value our a reductions the that also by that year recognition means to as consecutive to leader engagement fourth throughout contributions a as chain, Disclosure CDP, valued our of the due for customers. is

pharmaceuticals we identified of magazine one in now where health Aptar employers care as France in are Capital the and best XXXX category. the #XX Lastly,

on to to with segment, I treat shown Before drug delivery in to details Bob I further approved Products in used product system rosacea, quarter Airless+ on X. solution launches our technologies over by speak and the National want to share launches innovation Starting several recently highlight recent turn China. the X, Pharma is Slide Administration about as call and our Medical the

Our proprietary dispenser in for treatment eye drop S. AbbVie's the Refresh over-the-counter squeeze lubricant of ophthalmic is used brand an U

mist in children's Next, to cold. natural and ultra-fine, our is Baby’s PureHale technology cough saline dispense used sterile Frida

is spray rhinitis Finally, new to pump deliver used nasal allergic in Turkey, a treatment. our

Turning fragrance rosacea dispensing dip-tube. Aptar’s to for Airless green system Avene’s . lotion Coty’s Marc Beauty, Jacobs, Wild recyclable our overcap, the pump, is fragrance Daisy and colored dermo-cosmetic custom new solution features delivery

pump technology reloadable by new men’s line Zhiben. is care in featured fully And featured care a U.S. our airless beauty recyclable Our is launch on skin on Chinese skin brand, the lotion a

to Closures. Moving

Gatorade is Water. cap closure is U.S. evident new the PepsiCo's the mono-material, on And Voss for featured tamper our sports found dispensing both water, Our in here line the solution of

recyclable St. fully Ives used brand for is Unilever's scrub. skin tube top Our

closure that featured scoop Finally, a on is in-molded snap-top Nutrapharm’s customizable, Latin in our protein supplement tamper-evident, features America.

to Bob. the turn would I Now to over like call

morning, Thank X, you, to Starting like quarter. everyone. summarize I would the and on Slide good Stephan,

X%. and included strong X%. well sales to translation drug North Therefore, core primarily market. a X%, in This delivery due reported increased grew benefit in as sales proprietary improved of currency as Pharma's sales Our growth injectable approximately American recovering systems,

adjusted EPS. Slide $X.XX, year's X, prior shown which adjusted quarter earnings is share over As first increase per XX% reported the on a we of

increased expanding the margins segments. of by per driven result X by we all a our share lower provided operational quarter, first outlook. and in led to range performance adjusted earnings a in achieved rate from which higher versus quarter the prior Improved During XX%, $XXX tax year's million, EBITDA the

Turning segment quarter. to by of the for the some details

Our increased in due components. Pharma segment's systems, especially delivery to volume and growth, elastomeric proprietary our XX% core sales drug

nervous segment sales core in emergency which by we sales proprietary well the therapeutics breaking at in medicines. rhinitis, by driven systems, strong increased of Looking start asthma, extremely will Pharma performed Prescription XX%, and delivery market, out the our quarter. allergic central system drug sales

increased for prior was year which repeat. and the Core implementation, offset operations adversely affecting by more care an Core over quarter to decongestants higher health ERP solutions, not and X%, decline XX% due impacted nasal the sales days, which which did for than dermal. Injectable Consumer sales saline increased nasal shipping demand system in

increases demand XX%, Pharma's increasing in several solutions point products including on adjusted X% prior in We molecules. returning the elastomeric more X quarter. end than used for our and year's components with EBITDA and small improved biologics Core sales a dose quarter, saw for markets, material science the margin active was probiotics for improvement our applications. solid oral from

to X% the quarter. our in Core Beauty Turning sales decreased segment.

the prior were recovery difficult was XXXX. sales in sales market period solutions of muted year for sales. of fragrance results. sales increased quarter facial offset anticipated, but growth in growth Overall, dispensing and to for mass As slowed flat for Volume of strong by Regionally, in beauty showed after quarter. a in pass-throughs. contributed skin resin the beauty fragrance rapid our prestige comparisons with signs the North America dispensing the care Core solutions

in the to to market care sun Core X% Care decreased softness, America North Home primarily sales due increased by due Europe. for sales the widespread personal core and sales care driven market applications. X%,

segment's on market Closures due EBITDA North an by core improved the cost care year's and home was management. quarter our The improving personal approximately This segment's due the sales improvement operational margin increased sales. focus margin to along compared to The increased performance, adjusted continued with quarter with care X% American for with XX%. prior was

growth The includes North food positively to sales positive strong market regionally. core and friendly customers America in led beverage closure while protection tooling as the products expansions American food transition sales at This first improving the impact to increased When and from Europe to looking lower new by offset a market America closure. in sales continue sales our environmentally for spices for closures, quarter. was the by results, Europe food contributed in X%. capacity Strong North in dry North

the for our Regionally, adjusted primarily the to a timing closures. Core rebounding sales a extended quarter. which of the X%, North due In and same an decreased conversions had caps around in EBITDA closures market period positive decrease decreased after X%, on care care, sales sales tethered last beauty impact home European health year. includes decline. segment's core a with in beauty, America increase slight The Latin America demand category, customer increased care X% was period to for due margin Beverage regulations. mainly compliance and XX% to core in over fourth quarter, personal

QX of for year increased we and XXXX, the the and In million, $XX amortization Asia. depreciation expansions X% of Free had expenditures segment operations which North flow majority expense was quarter. sales. over million. of or for Reported $XX cash approximately capital X% was were approximately capacity quarter cash in million quarter million XXXX, approximately prior flow our the of $XX to Pharma in approximately In $XX first Europe, from the America,

second to anticipate equity rate The to quarter fair the changes our second range strong our adjusted restructuring earnings value of per is XX%. the summarizes which the share, acquisition the investments for X, to expect momentum in share. Slide to and range to $X.XX XX% in Moving estimated costs, quarter and We be any unrealized per excluding second tax outlook $X.XX of expenses, continue for quarter.

a year expecting quarter. small prior are We to the compared have impact positive to currencies

to depreciation be $XXX for estimate to We and currently XXXX million million. amortization $XXX between

to pursue approximately to continue the with in value to We and in which business, $XXX of balance million, $XXX majority of dividends any X.X, capital invest sheet closing, expenditures continue a have repurchases. strong leverage us the in to grants allocated the continue government our ratio XXXX, opportunities segment. In million and of capital to our with allows Pharma between shareholders a be return of form we net strategic to and expect toward

dividend addition totaled for our cash approximately to million. payments repurchased about quarter, In we shares XX,XXX in the shareholders, which $XX approximately to $XX million

we At will provide comments to this time, a Q&A. few Stephan before closing move

start drug X. continuing momentum in in very continue following quarter delivery closing, quarter of balance for quarter In as biologics. for strong elastomeric our We systems Bob. for the year. in Demand our see X the the demand second a and will components well Thanks, proprietary

North As delivery our build American dispensing, consumer market grow proprietary especially full systems within the range we long-term this ]. core year. [ to technology for our recover of demand our XX% sales to for X% drug to for destocking quarter target from continues the a to expect see reminder, our X We in as closure

EBITDA call management to Improving through would performance a operational strong open questions. that, margins cost for up and like the to focus. With your I be continues

first question [Operator Bank comes Instructions] of from of the The with George line America. Staphos

core different really things, mentioned categories product And XX%. taking again and to X% this X should but in various that that grow that's you base or within are obviously, we the how -- value, expect at to my Stephan, first year expect that its growth doing comparisons, to XX%. range the saying question. of That's trend pharma X% end markets given you to normal terrific

both. you Second question to

what term In the you longer we in terms in terms that should of Europe, tide you're of to out worry about sea, that's be Yes, about from Europe? and the and so going beverage else speak, is mentioned longer the you're tethered beverages closures going the plastics at worried implications term. in for are timing closure, all to but to to benefiting have something issues

just the we for George, to course, Thanks, solutions pharma, last drug year. then, we that and fine. could proprietary year, really hear nicely growing from good situation don't are we of And really, growth. the see within the continued in and biologics, see we you dispensing with Look, rebounding are change plus

significant in injectables, we from us, . not the benefit the growth. hangover COVID just was so For

be sorry, good see to comparisons growth active for year-over-year overall, the we -- material returning the solutions well, same quarter for for going injectables technical But every as bit a term. scary, in to is Now growth.

the proprietary and by So bodes obviously really for led broad-based, the business. solutions, that well dispensing drug it's

overall, the now, There new There's transitioning technical tethered some Now beverage, see is to any But adjusted beverage right we look, caps. the to getting in machines to of inventory business. effect some terms of effect. don't is caps. the everybody concern

cycle of think analysis the Europe to in total reality I have pushing for plastic even carbon XXXX. we not passed overall, But be saw may now panic some Unilever capitalist. in and peak their prevails, footprint life also true that goals out you

that returns. general I just a there's think pragmatism

The next with Baird. Ghansham Panjabi comes line of from question the

have you [ that there level, of growth Obviously, Did outsized just because in obviously, terms what margins And be know I in in, very, year, they base from that leverage over with up parallel I'm I growth? mean bit a in of nice down a maybe And effect thought for that last that operating year. more mix line strong quarter, aversion because just of very last having the a and asking pharma, reasons in would? you basis. would of were operating ] given thought extent the on just sort growth? injectables related margins the come built very question. Is little the year-over-year the first just but

expectations. faster, on has negative have injectable Remember XX% mix therefore, And when pharma. liked. much overall is I bigger with might would that expansion than see and faster, in pretty that line much you don't impact say you grows much a

overall, line. fully So -- is this in

point there's other I innovation business The keep and reinvesting course, reinvesting we cost would is, in, of keep new it's make, We in one pharma. business, including development. if

what are we margins line in So with expected.

this of sentiment to comparisons to And remain What's just market? talked that for obviously, to you Are outlook that that on then rest sort mean, for segment? growth customer of about sure. fragrance, We've past. the expecting to expand going year. specific difficult. be your positive for I the the in are -- at Okay, point still the

positive. remains Yes. Sentiment

well. comparison expect particular, given would the in boom the in end the quarter to the difficult, X% year to last is continue X, but fragrance year launches course, as we to range. X% of Of in somewhere perform We what America. see good the ends in segment this Latin in especially we all some up to reminder, sell strength also the continuing and And world, a regions over Europe

makes I to think X% the So overall, X% sense.

with The comes Jefferies. next line from question the Daniel of Rizzo

segments? are that mentioned point you X expansions we end. to would was would capacity those I capacity pharma what the I know your just don't I And an utilization that, expand can guess, you next what in have wondering, years? further, post would like You coming over at expect, with to think what be the

Yes.

we year, on kind new building. I within with think later with phenomenal I you will are come buildings. the see building, it. further trip new And again, that it's if but of us mean can done done this we the big state-of-the-art create a you -- capacity. with We're

this had nothing within may increments capacity need certainly, is the So we we we capacity being then add new cavity X-year as more in existing wing have we ample smaller another like what building. the Congress, road and if we increase they be capacity will further a they automate I the it of Granville. -- the period, mean, increments but as that's as down to validated in do in counts,

or approval or sure terms is the in expansions [indiscernible]? the of When it that makes -- making inspections it easier you facility, do you within getting

it. new new be along. can crew context out has in to be made where facility. big all I ordinary the Every machine fully not has course. that speed, an and -- the the deal investments mean, validated. a the It's every a of in to new make to is be we've big But up tool is course, it didn't happening X Granville We investment massive, validated. of like Of ecosystem

but per Granville we Granville As X upgraded is se, really massive. we upgraded as X, the

next with comes the Matt William from Larew of The Blair. question line

and preference to expanding has there's improved, in emerged the rate. to back participation view multisource multisource, your how circle space perhaps really from thoughts And updated assessment your within that arrangements pandemic, of sole just to or the discussions? has get a to just rate extent spread greater wanted volume. customers your And source referencing participation if global the to we've injectables. those And been your important footprint I now on how

Yes. Look, or have coated to be have plungers, stoppers, We you -- have fix basic they up, could SKUs, can fundamentally, uncoated. spend that hours and question. shields, just needle you you have back on you

more, you of the there Now many the provide. quality are level assurance, level that data of depending on

that really leader. allows said, to equivalent new dual molecule, that has as market the the the So in long-term are project participate helped That industry we a people pandemic our having demonstrate to to in capabilities project, biologic start every us we sourcing. new don't

They pick the they're going horse, to ride.

second COVID a vaccines, people source a If massive, you have the to want for with of just we security supply. have like product were did big

You a our strong, building. choose I has biologics And general, don't or very lot for other people and pipeline providers behind In a all COVID say us vaccine. run want whether is to factors. can us. That's product out keeps of of

that's biologic is in to geographic qualifier, ability then people. business a footprint for some obviously, but geography. vaccine capability, X what has also much, model. talked to model particular provide molecule -- it then not a important We a important with the about almost with Technical an support that is do a other but have very And particular fundamentally or a business

auto-injector not getting the are business. We into

are not our with competing We customers.

sometimes, somebody to And customers prefer deal competing not them. with who's with

for to all factor, play those in region is -- region absolutely having the critical. ability a So and supply

Okay.

just develop change be seen you've for medicine in any and to of on As half if the could year. on to would the in which back of check nasal an the And epinephrine, opportunity sort the a obviously, one. follow-up, emergency then of demand Narcan there's delivery wanted product maybe start

like. might your just assessment of curious for So opportunity that what look

Sure.

importance first. the about approval. before the spoken Let's We've over-the-counter talk Narcan of

states to or Walgreens is picking Narcan -- has Now and states that the the business harm schools, and receiving Aid, what Rite for to settlement that into to out Narcan is up not for reduction it's But bulk XX the allowed important to or be in it and money so it's CVS police next meaningful. and stations a not of so on, state received it then purchases each walking agencies to will make disburse so has turns for not years. people XX distribute and

our broader greatly of distribution much we into facilitated a who it into So community maybe all has day, knows into schools, Narcan And have set X centers responders. prime homes.

will changes us. helping it, and On excited all the they So the in on is in receive Narcan philosophy very to the health reimbursement it, good the end totality, lot game distribution. day really certainly, A single for sense. the about what this the caution launches eventually should X, epinephrine, reception. product patients we it think depend But course, but ton would makes if product I build. of of excited and we're start And that's about But of are no really payers. insurers a product

comes next George Bank of the question Staphos line The from of with America.

looking quarter percentage was here, this just for first progress we a goals from it cash quarter? was at remind expect versus first some Bob, talk sales, of have, first SG&A quarter this to about care update bit for year? could probably in us was as what terms you broadly 'XX. just net if the a from then your lower of quarter. little us. you could a down timing being should if on going CFO What Obviously, last There you touch And more operations, this effects but you year, in

the at was weekend think you cash little and first the primarily slight The it also receivables. a because in some I holiday quarter strange the to in the inventory the more was from in capital, flow end. right operations, bit George. had quarter areas in of decrease Remember, particular, working due Thanks,

higher all we'd was into our then once but a collected than got expect, those balance April. were receivable what So bit we normally

then as we we too So I our And haven't that. into SG&A sales, the of -- when look a look percentage really changed target. wouldn't at much

XX.X% We we fourth run where that's -- be of of we and at that. really That's expect the to of out, haven't rate year, a by kind full not modified quarter. rate run stand on the going for course,

line Gabe comes of The Fargo. next the from with Hajde question Wells

ramp. start-up would commercialization ones. Is to how with you about away, that? me, again, in we flip $X.XX true? see or maybe of -- carrying quick go next then that are pharma to $X.XX costs And think Two associated Remind I . that year the guys guess, injectables

you think it got I Yes, right...

we'll we're yes, $X.XX is fixed of and where this a have we at for business you'll And see in plant from looking next to that for to $X.XX theory, absorption have new comes are kind cost go year. where then in away in a then year. as

one Can have ground here I maintenance years. you lot maybe recent been the looks remind model, our next then CapEx but a over bigger XXX on looking what covered Okay. side, picture the us a CapEx in out I XXX. few note there's And -- kind of like? of to

think, You I some mentioned key adding pharma capacity, X in regions.

portion the a what's of spend versus as you guess investment can new carryover what's I so out the break in targeted this And maybe injectables still year, pharma.

in $XXX know don't on the $XXX number, if on I me front but I Okay. is your rollout, maintenance of injectables runout million. million have what the to

to really I replacing we sometimes old for or call us improvement talked Very as will replacing a we assembly if old maintenance that an of it's rarely savings, we're and, a investment like-for-like, or cost productivity line. think meaning mold right? invest an between difficult categorize, it, before,

output of it type efficient, a higher typically with thing. We're more doing

of XX% in So cost XX% that the maintenance be those cover also true CapEx savings, would we total say between that productivity and ballpark. in-betweeners business, of would is some to and of

I in think $XXX right is So you're the range. $XXX to million

Okay.

you expansions, discrete injectables, spending this that everything heard but projects to that is $XXX above not you're going the safe on have it is million And just that of you that this I maybe on mostly pharma year, capacity say say year some related? the

the do a rollouts increases the lot we But -- predominantly I above isolated some think that's other areas. some yes, but of in fair that in a bit big the little a have talked we've mean I Yes. are excess capacity area. pharma bet

like it's run and If want so the you capacity. out look systems, Narcan, product of at to dispensing think the drug strong, about don't proprietary growth you obviously, in

expand a expand looking to keen and to not having hesitate of need ahead there do curve, and capacity. the we're you So

Thank you. no There are additional questions currently registered.

would the comments. Stephan to Tanda So . I like for pass to conference back now any closing

Well, for the questions. Great. thanks

we see, the and with to both at are is a ambitious productivity you last This ongoing with Investor our ensure all that grows our faster and line fully the you top the top structural bottom we executing plans on strong As gains. shared line. focus on September delivering than Day line on

have You that continuing throughout into now and balance off seen see the XXXX, XXXX, momentum a start out year. very play in that we of we're and strong to quarter X and the

Our order books and project pipelines remain strong.

in engaging of with and and is significant brands number customer our the productivity adding XXXX their to cost very can sustainability underway bottom efforts keep few a call, on all including We innovations bring well we and XXXX. our that line positively the they reduction products, contributions. mentioned regions. the the and overall are throughout A Our will value to drug overall and

of This In the a becoming point root find pride culture. additional teams taking and opportunities. into addition, energized in are company productivity our is to our

of competitiveness footprint We the all Argentina Europe, capacity And America. heard expand you've the Mexico. in regional are and we and increasing with North Asia, about our now also actions in

strong our for delivering productivity, sheet to and partnerships, and the a to acquisitions, said, value growth, solid also sized find shareholders. in both continue we of allows record have track and Bob As balance invest us

our of growth, growth, them double-digit all consider remain target our coming we overall and the expect even systems and a you So and year when drug grow growth delivery target. will period, takes continue inside pharma proprietary for the after to to puts

coming Injectables albeit to after has through rate. to in this pipeline a Closures is at but is Digital improve will continuing and a with continue has of able be we Fragrance Beauty -- America The destocking year talked capacities will North strong the lower for wins. online about, and end. double-digit demand. project an year the serve and to health, to growth, validated additional grow coming haven't

against are very with actually, we Latin a our team but which of Argentina, of background, America economic And is the -- well positive generally very addressing. exception executing course,

progressively China but is Asia, and about pulling talked India is haven't recovering strongly. We very

coming of we and manufacturing a as fixed sales cost SG&A talk, down. And percentage expenses are as overall

So with all to of road. and energized we're more for us 'XX, discuss on looking makes forward this the very you

you call. all conference Thank your today's concludes for This participation.

You lines. may now disconnect your